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Bankrupt Hanjin seeks court protection for its ships

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Image copyrightAFPImage caption Several Hanjin ships have already been seized

Troubled South Korean shipping giant Hanjin plans to take legal action in about 10 countries to prevent its ships from being seized by creditors.

South Korea’s financial regulator said the company wanted to extend the legal action to cover 40 countries as it seeks to protect its fleet.

On Monday Hanjin saw its shares plunge by 30% when trading opened but it quickly recovered those losses.

The bankruptcy is the biggest collapse the shipping industry has seen.

It left the company’s fleet around the world in uncertainty and unable to enter ports as creditors were eager to seize and repossess the vessels.

According to Hanjin, 68 out of its fleet of 141 ships have been stranded in international waters, while several ships have already been seized in ports.

Hanjin last week filed for receivership after attempts to raise fresh funding for the indebted firm failed. Its shares had been suspended since then and only resumed trading this Monday.

On Friday, the firm had filed for bankruptcy protection in the US, making a so-called “Chapter 15” filing with a US court, a spokeswoman said on Monday, which would help protect its ships from being seized.

The world’s seventh-largest container line has been unprofitable for four of the last five years.

The protracted global economic downturn in recent years years severely affected profits across the cargo shipping industry.

Fierce competition and falling prices have lead to a $5.4bn (£4.1bn) debt for Hanjin before its creditors refused to offer a new lifeline.